This week’s stock market review

The tide may be about to turn for the UK retail sector. Last week, potential
bidders approached no fewer than three British retailers. Storehouse, the
ailing retail group which owns Bhs and Mothercare, confirmed that it had
received bids for the two subsidiaries as well as for the entire group. Also,
clothier the Austin Reed Group confirmed that it too had been approached but
turned down the unsolicited offer.

Austin Reed’s stock price advanced about 30 per cent on the news.
Storehouse’s share price rose by about 56 per cent.

Marks and Spencer, whose value has been falling for some time, attracted a
lot of attention last week following speculation that French retail giant
Carrefour could be interested in buying the struggling UK retailer. Frantic
transactions in M&S shares drove the price up by more than 10 per cent but
retreated after the company declined to comment on the rumours.

Mixed messages from Rolls Royce hits its share price

There were mixed blessings for Rolls Royce. The company announced a healthy
jump in pre-tax profits for the year to £360m, up 11 per cent. Investors
appeared unconvinced, however, about the management’s forecast for next year.
The company expects next years profit’s growth to be at least 10 per cent. At
the same time the company warned about the impact of exchange rates on
earnings, huge restructuring costs and a likely fall in engine sales. The
conflicting messages gave investors cold feet and the company’s stock price
fell sharply.

Biotechnology provides the buzz on the London market

Late last week the London stock market recovered from its recent gloomy performance.
The biotechnology sector provided much of the buzz, in particular Cambridge
Antibody Technology, which jumped by more than 60 per cent following the news
that it has signed a 10-year deal with Human Genome Sciences in the US.